Indian takeover deal fails

27 June, 2006

SOURCE: Flight International

India’s biggest ever airline takeover deal collapsed last week, with both sides arguing over who has the right to millions of dollars in frozen accounts that were to have been used to fund the acquisition.

Domestic market leader Jet Airways announced in January that it had agreed to buy Air Sahara for $500 million, but the deal collapsed after Jet walked away following a failure to secure final government approval by a deadline of midnight on 21 June. Reports said Air Sahara’s owner, the Sahara Group, offered to extend the deal’s closing date, but Jet said it would only do so if the purchase price was slashed, which Sahara refused.